The financial press seems enthralled with the business cycle. Expansion, contraction, rates and stocks up, rates and stocks down. Right now they’re all stumbling over themselves looking for signs of a recession. Recessions, of course, tend to lower rates since the demand for credit drops. European growth projections are poor. No one really knows what is going on in China. In the United States, the Federal Reserve has pushed the Fed Funds rate (the interest rate at which banks and credit unions lend reserve balances to other depository institutions overnight) from near 0 percent to what could be 4.75 percent by year end. There are some signs of softening in the U.S. job market (like job openings declining), but household debt service levels have dropped and savings levels are doing okay. The team at the Mortgage Bankers Association is forecasting appreciation levels near 0 percent for 2023 and 2024. There’s your snapshot! (Today’s podcast is available here. This week’s is sponsored by Richey May, a recognized leader in providing specialized advisory, audit, tax, technology, and other services in the mortgage industry and in banking. Listen to an interview with Richey May’s Michael Nouguier on the latest in the mortgage cybersecurity space.)

Broker and Lender Products, Services, and Software

Early bird registration is now open for the 5th Annual SimpleNexus User Group (SNUG) conference being held March 13-15, 2023. Join SimpleNexus, an nCino company, at the picturesque Snowbird Mountain Resort in Utah for an intimate gathering of SimpleNexus customers, industry thought leaders, technology partners, and SimpleNexus’ renowned team of experts to gain insight into technological innovations and strategies to help you succeed in the market ahead. Never been to SNUG? Check out video highlights from SNUG 2022 for a sneak peek into what you can expect, then complete your early bird registration for SNUG 2023 to reserve your spot. See you on the slopes!

The Capacity team enjoyed sharing new tech solutions at #MBAAnnual22. The mortgage industry is in dire need of a platform that securely integrates with lenders’ key systems, providing loan officers with instant, actionable answers about borrower opportunities, loan statuses, guidelines, and more. Capacity uses conversational AI to automate borrower support during the loan origination process while increasing lead capture and conversions. Capacity partners with lenders to deflect 90% of repetitive tasks away from support teams, allowing them to scale their support functions without hiring additional FTEs. By shifting traditionally manual work to Capacity, lenders can increase throughput and efficiency; scaling their support for LOs, Brokers, and customers alike. Are you ready to provide superior customer support 24/7/365? Deploy within 30 days. Request a demo.

Just as these Harvard-approved tactics may help you recover from the festivities of MBA Annual (thank me later), Sales Boomerang + Mortgage Coach can help you recoup millions in lost loan revenue. Sales Boomerang’s automated loan opportunity alerts identify high-intent leads in lenders’ databases. Then, Mortgage Coach makes engaging, educating and converting those prospects a breeze. Just ask Legacy Mutual Mortgage’s Shawn Kaplan, who uses Mortgage Coach to learn about his clients in the earliest stages of the homebuying journey and determine the best way to communicate with them. As Kaplan attests, “Not everyone processes information in the same way, but I know I can use Mortgage Coach to reach people visually, emotionally and analytically.” Alleviate your lead generation and conversion headaches with SB+MC.

Fifth Third Bank, National Association, celebrated the launch of its Mortgage Warehouse Finance business at the Mortgage Bankers Association Annual Conference in Nashville this week. The topic of many discussions at the conference this year centered around how to optimize each person, each process, each relationship – everything matters in a rising rate environment. As one of the largest regional banks in the U.S., Fifth Third offers the liquidity, credit and banking solutions that mortgage bankers require, all in one place, including warehouse lending, MSR financing, treasury, capital markets and loan purchases through our Correspondent Lending group. Contact Donnie Martin, David Ingram or Jeff Bonner to discuss how they can help you maximize your banking relationship as you lead your business through this cycle.

Long-tail marketing engagement platform: Having the ability to engage with your new and existing customers in a long-tail fashion can provide tremendous value in brand loyalty and customer retention. With HouseCanary’s ComeHome platform, you can engage with your large book of business to generate new opportunities for your loan officers.

The key to finding profitability in 2023 is transforming your borrower experience and back-office operations. Maxwell offers innovative technology that centralizes your processes, promotes team productivity, and helps you close more loans with less work. Lenders using Maxwell Point of Sale slash their time-to-close by 13+ days and save an average of 21 BPS in costs per loan. Loan officers using Maxwell POS close 15% more loans per month, helping top lenders attract and retain the industry’s best talent. Beyond front-end improvements, Maxwell Processor Edge, a first-of-its-kind processing workflow technology, transforms the loan fulfillment process, accelerating document review, reducing errors, and boosting processor capacity. Set up a call with our team to learn how you can increase your lending profitability and combat margin compression with Maxwell technology.

News and Updates Across the Board

FHA published a proposed rule in the Federal Register, Indexing Methodology for Title I Manufactured Home Loan Limits (Docket No. FR-6207-P-01), for public comment through December 17, 2022. This proposed rule creates an indexing methodology based on property data collected by the US Census Bureau and that establishes loan limits based on the number of sections that make up a manufactured home. Instituting this indexing methodology will expand opportunities for borrowers to use affordable FHA-insured financing for manufactured homes titled as personal property, manufactured home lots, or both the manufactured home and the lot.

FHA recognizes that mortgages with small principal balances present distinct challenges for mortgage originators and servicers. As a result, borrowers in underserved communities often have limited affordable home financing options, particularly in geographic areas where home values are lower. FHA published a request for Information (RFI) regarding Small Mortgage Lending seeking input regarding these barriers to small mortgage lending insured through the FHA program, as well as feedback on ways to improve FHA policies and programs to support affordable homeownership opportunities in underserved markets with lower housing prices. Interested stakeholders are encouraged to review and provide comments on the RFI through December 5, 2022 following the methods outlined in the RFI. Review the RFI Regarding Small Mortgage Lending for additional details.

FHA published a proposed rule in the Federal Register, Adjustable Rate Mortgages: Transitioning from LIBOR to Alternate Indices (Federal Register Docket No. FR-6151-P-02), for public comment. The rule proposes to transition existing FHA-insured forward and Home Equity Conversion Mortgage (HECM) Adjustable-Rate Mortgages (ARMs) from the London Interbank Offered Rate (LIBOR) to a spread-adjusted Secured Overnight Financing Rate (SOFR) index (after the one-year and one-month LIBOR indices cease to be published on June 30, 2023).

Also, the rule proposes to remove LIBOR and add SOFR as an approved index for newly originated forward ARMs. Stakeholders are encouraged to review and provide comments on the proposed rule by following the methods outlined in the Federal Register Notice through November 18, 2022.

AmeriHome posted Product Announcement 20221012-CL on October 19th retracting, in its entirety, previous announcement titled 20221010-CL Product Announcement – AmeriHome Condo Unavailable & Unacceptable Projects List. in its entirety.

Excelerate Capital offers Brokers looking for a business purpose Investment Property Loan. Debt Service Coverage Ratio (DSCR) loan, ideal for true investors qualifying with minimal documentation, using rental income only. Available for 1-4 Residential Units and 5-8 Multi-Family Properties, DSCR <1.00 acceptable with LTV restrictions. DSCR is a business purpose loan and not for personal household use.

FAMC/Citizens Correspondent National Bulletin 2022-18 includes information on IRS Form 4506-C, Disaster Tax Filing Relief and USDA-RD FY 2023 Funds. See the bulletin for additional information and all lock, delivery and purchase by dates, if required.

PRMG Update 22-58 includes Product Profiles changes to certain manufactured home requirements on FHA Standard and FHA High Balance loans. Clarification regarding commission income requirements on VA Products. Clarification on VA Standard and High Balance loans being refinanced without a current scheduled payment and VA prior approval scenarios. CalHFA Conventional Products clarification on use of lender’s credit qualifying income.

Capital Markets

Looking to receive more TBA bids? If your opportunities to trade with regional broker-dealers are becoming increasingly difficult to manage, or you are relying on over-the-phone TBA trading and manual spreadsheets to conduct and track trades, Agile is a more efficient and transparent way to engage with the broker-dealer community. Secure better bids and diversify your trading volume. Read this recent case study to learn how Towne Mortgage is leveraging Agile to grow within the broker-dealer community. Agile’s RFQ platform and Agile’s hands-on support team helped Towne gain access to a deeper bench of broker-dealers, resulting in more competitive trades and simpler trade reconciliation. Agile’s platform, which is exclusively licensed by MCT, made it easy to process multiple Assignment of Trades (AOTs), saving valuable time and significantly reducing the chance of error. If you have questions about this case study or would like more information on Agile, please contact Agile today.

A volatile real estate market has created uncertainty for investors, lenders, and proptech companies. For a critical look at the immediate and long-term future of real estate, join HouseCanary on October 27 at 10 am PST for a discussion with Brandon Lwowski, Director of Research, and Ketan Bhalla, Head of Product, as they recap housing trends and discuss how the broader economy is impacting the real estate landscape. Click here to register.

Turning to rates, we had another rally in the bond markets yesterday, which is odd considering the Fed has signaled it still has a ways to go hiking rates. The market received a better than expected New Home Sales report for September, though sales declined 10.9 percent month-over-month in September to a seasonally adjusted annual rate of 603,000 units. On a year-over-year basis, new home sales were down 17.6 percent, reflecting affordability pressures for lower-income buyers. The jump in median and average selling prices was skewed by higher-priced homes accounting for a larger percentage of total new homes sold. Separately, the completion of the day's $43 billion 5-year note sale saw a notable improvement in demand from Tuesday's 2-year note auction.

Today brought the first look at Q3 GDP (2.6 percent). We’ve also received September durable goods orders (+.4 percent, less than expected, -.5 percent without transportation) and weekly jobless claims (217k, lower than expected: the job market is still strong). Later this morning brings Freddie Mac’s Primary Mortgage Market Survey, KC Fed manufacturing, and a Treasury auction of $35 billion 7-year notes. The European Central Bank was also out with its latest monetary policy decision, a 75-basis point hike. We begin the day with Agency MBS prices about unchanged and the 10-year yielding 4.03 after closing yesterday at 4.02 percent.

MLO Jobs

“Are you feeling unsupported as an originator after the shift in the market? At Ross Mortgage Company, we do things differently. We value people first and give every loan officer the best support possible to win more deals. We won’t waste your time on flashy headlines - instead we believe in shooting you straight. Send an email to Kevin Coleman today to schedule a time to chat and we’ll prove we really are different than the other lenders trying to recruit you!”

The awards just keep coming for PrimeLending’s people first culture. Over the last few months alone, the company ranked #21 in Fortune Best Workplaces in Financial Services, #19 in Fortune Best Workplaces for Women and #12 in Fortune Best Workplaces for Millennials. On top of that, PrimeLending earned national Energage Culture Excellence awards in three categories – Employee Appreciation, Employee Well-being and Professional Development. In fact, 97% of our employees say PrimeLending is a great place to work compared to 57% of employees at a typical U.S.-based company. We make sustaining an empowering, supportive environment where everyone has an important voice, can be themselves and thrive in their career a top priority, and receiving these awards confirms we’re on the right track. Interested in joining a company culture where you are treated with care, respect and appreciation? Contact Nic Hartke.

Out of Massachusetts comes news from the KLR Group about an addition to its leadership team. Lynn Riordan has joined as Chief Operating Officer. Lynn’s role as COO will focus on client service delivery, success and new product development. The KLR Group delivers high quality and client specific QC, Review, Audit and Due Diligence services to mortgage lenders, servicers and investors nationally.